Sweepstakes machines not completely gone

Stroll through the front door of the Southern Convenience store in Gastonia and you’re met by an expected mixture of merchandise.

Michael Barrett

Stroll through the front door of the Southern Convenience store in Gastonia and you’re met by an expected mixture of merchandise.

Potato chips and candy bars on a shelf. Magazines on a rack. Cigarette lighters, Slim Jims and even knives in a display case for sale on the counter.

Yet against the front glass wall, facing away from the parking lot at 861 N. New Hope Road, are four sweepstakes gaming machines. They’ve been there for months, and strongly resemble the devices that the N.C. Supreme Court declared illegal in December.

Southern Convenience’s owner says he was told by the machines’ manufacturer after the court ruling that they are not out of compliance with state law. Beyond that, he said he has paid thousands of dollars in license fees to the city to operate the machines, and believes he is within his bounds to continue doing so while the court ruling is contested.

Authorities aren’t sure. While several large-scale, high-visibility sweepstakes businesses around Gaston County closed within the last month, police say they haven’t poked their heads in every single convenience store to make sure each sweepstakes machine has been removed.

“We will definitely go out and check on locations that people report to us,” said Gastonia Police Capt. Ed Turas.

But James McEntire of Gastonia said he recently got the runaround when he reported Southern Convenience’s machines to city police. He doesn’t understand whey he still sees the gaming devices in gas stations here and there, if the state’s highest court said they’re illegal.

“I went to Gastonia police myself because I have a friend who’s addicted to those machines,” said McEntire. “And I was hoping when they were banned, that would take care of it. But it hasn’t.”

Rocky road

Video sweepstakes businesses emerged across the county last year after a favorable N.C. Court of Appeals ruling, which deemed a 2010 state ban on the operations to be unconstitutional. Gastonia and other cities set up guidelines to limit where the businesses could open, and began reaping big revenues in license fees.

The state Supreme Court reversed the Court of Appeals decision in December, upholding the 2010 ban. Attorneys for gaming companies asked the U.S. Supreme Court to delay the embargo, to no avail.

Video sweepstakes games are played on computer terminals and can award cash prizes. They’re often found in small numbers in convenience stores or bars.

Machine owners previously dodged gambling laws by selling Internet time and referring to the games as “promotional items” to drive the Internet business. Since December, many gaming operators have said they'll respond by changing the machines in ways that escape the ban and keep attracting players.

“Probably 90 percent of the operators will close down voluntarily,” Brad Crone, a spokesman for the Internet Based Sweepstakes Operators, told The Associated Press. “Some operators may be looking at new software and new gaming options that will more than likely have to be tested in a series of new court cases.”

In some cities, such as Roanoke Rapids along I-95, police have taken no action against sweepstakes operators on the advice of legal advisers.

Gastonia Police Attorney Stephanie Webster said last week that there’s similar uncertainty here, due to questions about software loopholes.

“If people are searching for broad answers, they’re not there right now,” she said.

Uncertainty prevails

Jeff Mahmood owns the Southern Convenience store, as well as a gas station along Garrison Boulevard, with his brother.

They own several such businesses in North Carolina and New Mexico, where Mahmood lives, and sweepstakes machines are a part of what they offer at virtually all of their businesses, he said.

“It helps us to bring the business in,” he said. “People come to play a little bit, then they buy a soda or something else, and that helps.”

Mahmood said after the court ruling last month, the gaming company that owns the four sweepstakes machines at Southern Convenience called and assured that “I have nothing to worry about.”

“They said they filed an appeal against the ruling or something like that, and we were good,” he said.

When questioned about the machines Wednesday, Mahmood voiced frustration with the back-and-forth uncertainty over their legality here in recent years. He has no interest in breaking the law, he said.

“We are really confused. We don’t know what is right and what is wrong,” he said. “Whatever (police) tell us, we will hear it and go by their words.”

But Mahmood emphasized he paid Gastonia $3,500 in license fees to legally operate the four machines for a year. If it’s determined they’re actually illegal and must be removed, Mahmood said he should get back at least a portion of what he paid.

“Why did we pay the license fees if it’s illegal?” said Mahmood. “Technically, I’m supposed to get that money back.

Gastonia City Attorney Ash Smith said they’ve already fielded those requests from other sweepstakes operators, and declined them.

“The city ordinance is very clear that no refunds will be given for privilege licenses, even if you stop doing business during the middle of the year,” he said, adding that would violate state law. “Privilege licenses are non-refundable.”

You can reach Michael Barrett at 704-869-1826 or twitter.com/GazetteMike.